Blog

 

30

Jul

Identifying Risks: How Lack of Leadership Commitment Affects Your Business

Author: Avetta Marketing

Identifying Risks

In order to operate at your most successful, your business must identify risks before they become a reality. Your ultimate goals are to increase revenue, add shareholder value, and grow your company brand. Business owners should constantly be on the look-out for things that may seriously put those goals at risk. Once the risks are identified, they must be addressed. A plan must be put into place to mitigate and control them in order for your business to grow as it should. One of the biggest challenges businesses and operations face is prequalifying a supplier chain. This risk can directly affect your brand, which protects and influences your company practices, standards and shareholders, illustrating the importance of mitigating the risk before it creates a bigger problem. 

Why Is it Important to Protect Your Brand? 
Your brand is everything to your company. Every contractor and supplier you choose to work with indirectly affects the way your company is viewed by your customers and the public. They are, in a sense, an extension of your company. Your customers don’t want to hear you blame problems on your supply chain – they want to trust that you did the work to minimize any risk. Any time you have suppliers or contractors working on your site, it’s absolutely essential that you have a contract management system service in place and understand the risks associated with them. Any unforeseen accidents or problems will negatively affect your company and your brand with the public. One way to address problems before they arise is to pre-qualify any suppliers on your site. Unfortunately, this process often fails when not handled correctly. While this process can be affected by things like lack of communication, poor defined standards or poor enforcement, the first major roadblock is lack of leadership commitment. 

An Essential Criteria for Success 
In order to fully address your compliance needs with suppliers and contractors, everyone must be on board with the idea. Multiple departments may be involved in identifying and minimizing risks, and communication is scattered and ineffective if leadership is not engaged in the process. Communication is an essential part of success in any business practice– and there is no exception when it comes to supplier pre-qualification. Good communication must flow all ways, including: 

  • From organization or business leaders to employees 

  • Employees to leaders with important feedback 

  • Leaders and employees to suppliers and contractors 

If the communication is stunted from any essential group to another, the entire process may fail. Communication is often lacking in situations where leaders of a group or organization are not fully committed to or understand the importance of the particular process. Basically, if leaders aren’t on board with the idea of supplier pre-qualification, your project may be at risk. The leaders of the organization must fully recognize the value and benefits that come from pre-qualifying suppliers and contractors in order to ensure that communication is open at all levels. They must know the additional value that comes from qualifying those you work with, and how it can protect the company and the brand. 

Leadership Commitment Starts the Process Off Right
Without the backing and commitment of the leaders of the organization, most programs will wither and die off quickly. The goal is to sell the leaders on the idea of pre-qualification until they are as passionate about it as the rest of the group. Once they are fully committed to the idea, they are more likely to push it through themselves, and open lines of communication that get the job done. In business, the most successful programs have one single champion within the group, and executive leadership to back them up and help push the program forward. The case of supplier pre-qualification is no exception – if your leaders and executives are passionate about the cause, your project is likely to be successful. 

Minimize Risk with Supplier Pre-Qualification 
When your project involves work with contractors and suppliers that aren’t directly employed by your company, risks must be minimized in order to avoid potential accidents and mishaps that reflect badly on your company and your brand. The first step to mitigating risk is to pre-qualify your suppliers and contractors. The most important part of that process is ensuring that your leaders and executives are on board with the idea and understand the value of identifying risks before they arise. 

For more information visit https://www.avetta.com/solutions/supplier-prequalification, call 844-633-3801, or email blog@avetta.com